Paolo Scaroni, CEO of Eni, today presents the company’s 2013-2016 Strategic Plan to the financial community.
E&P: exceptional growth opportunities
> 4% hydrocarbon production CAGR to 2016, >3% 2016-2022
G&P: positioning business for sustainable profitability
under renegotiation 80% of supply volumes to be purchased
R&M: efficiency program relaunch and optimization
>€500m of EBIT enhancement by 2016
Versalis: confirmed turnaround
~€500m of EBIT enhancement by 2016
Transformed balance sheet
New leverage target range 10-30%
New shareholders distribution policy:
2013 dividend proposal expected at €1.10 (+~2% vs 2012)
New buyback programme
In the new plan, Eni targets:
high hydrocarbon production growth, supported by exceptional exploration successes;
sustainable profitability in G&P, through the supply contracts renegotiation, a focus on premium retail and LNG segments and sales and trading integration;
an ambitious cost reduction program and optimization of refining activities aimed at recovering profitability in R&M;
more incisive actions for development and rationalisations in Chemicals.
Exploration & Production
Eni confirms its strategy of production growth, raising its average annual target to over 4% in the 2013- 2016 period. This growth is based on a scenario of $90/bbl to 2016, but it is resilient to higher oil prices.
Eni’s growth strategy is founded on organic development, thanks to the significant contribution coming from key development hubs including – Russia (Yamal), the Barents Sea, Kazakhstan, Venezuela, the Far Eastand the sub-Saharan region.
Projects due to come onstream over the plan period will add over 700kboe/d of production by 2016. 80% of this new production will come from giant projects, and 40% will come from additional development phases of producing fields.
Beyond the plan period, production growth of over 3% per year to 2022 will be based on our diversified and synergic development pipeline, and on a low decline rate of about 4%, coming from dynamic reservoir management and intense production optimization activities.
Gas & Power
The outlook on the gas market environment, especially in Italy, remains challenging mainly due to a still weak macroeconomic environment. As a result, the Italian market is still oversupplied, lacking physical export capacity which would allow the reverse flow of significant take or pay volumes delivered to Italy.
In this context, Eni is renegotiating the most of the supply contracts in its portfolio. The renegotiations aim at realigning gas purchased with those of the prevailing hubs, aiming also at obtaining more flexibility in the volumes of the take or pay contracts.
On the commercial front, Eni will continue to focus on solid segments like retail and LNG, and support margins in wholesale through the enrichment of its portfolio with flexible and innovative products as today's market requires.
This is facilitated by the integration of this segment with trading within a new organization.
The EBITDA proforma adj expected in 2016 will be approximately 1.5bln euro.
Refining & Marketing
In Refining, Eni will increase the flexibility of its plants, optimizing the production cycles, reducing costs